Renesas expects strong demand for microcontrollers used in cars

Even as the debt crisis in Europe is ongoing, Yoichi Yano, the executive vice president of Renesas Technology Corp., expects that the microcontrollers used in cars will continue to be in high demand until March. Yano said that this is because automakers are working to make up for production cuts from the impact of the March 11 earthquake.

Renesas is Japan's second-largest chipmaker. Profitability of microcontroller makers is being threatened by the stronger yen. They’re also suffering from the low demand for chips used in TVs, PCs and other consumer electronics.

It’s really the automotive chips that have been keeping the microcontroller makers happy. Yano revealed that the financial crisis has not been affected by the demand for cars that use many microcontrollers.

He also said that the demand for use in low-cost cars is “strong” as well. Renesas is hoping that its market share will increase with its low-power chips, even as manufacturers work to decrease their dependence on any one parts maker after seeing Japan's automotive supply chain savaged by the March 11 earthquake. The quake had damaged Renesas’ Naka factory, which accounts for about 15% of the chipmaker's total capacity.

Production was delayed by months and its output levels only got back to pre-quake levels in September with the help of outsourcing. Renesas was created from the merger of two losing chipmakers. It has a nearly 30% share of the world's microcontrollers that are used in car engine control systems and power tools but aims to have a 35% share by 2015.

Freescale Semiconductor comes second to Renesas. Yano is confident that the company will be able to achieve this goal due to its track record and its products’ strength. Yano said that its expansion will require that it has to be able to attract new customers in emerging markets and new regions.

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